Soybeans Commentary


Soybeans – Just My Opinion

March Soybeans closed 5 ¼ cents higher ($8.86 ¼), July 2 cents higher ($8.94) & Nov ½ cent higher ($9.13 ½)

March Soybean Meal closed $5.6 higher ($296.9), July $4.1 higher ($307.9) & Dec $2.2 higher ($313.3)

March Soybean Oil closed 24 pts lower ($28.83), July 27 pts lower ($29.56) & Dec 26 pts lower ($30.35)

Weekly Soybean Export Sales – 339.3 K T. old crop vs. 600-900 K T. expected – 22.1 K T. new crop vs. none expected

Weekly Soybean Meal Export Sales – 157.5 K T. old crop vs. 150-350 K T. expected – 8.6 K T. new crop vs. none expected

Weekly Soybean Oil Export Sales – 5.6 K T. old crop vs. 8-45 K T. expected – no new crop vs. none expected

Early in the day session May soybeans traded as much as 14 cents lower, May meal $4.00 lower and May soybean oil 45 pts lower. Shortly thereafter the meal market started to rally on what looked like crusher buying and that rallied soybeans as well. May meal rallied $10 off of its low and held on to the majority of those gains into the close. May soybeans rallied as mush as 19 cents off of the early lows and a good portion of that rally was sustained into the close. Soybeans are a difficult buy and we are doing a decent meal export program. Adding to this are the fears that the Argentine will be a tight holder of his soybeans and that could mean some better meal business for the US.  Soybean oil continues to be the weak sister. It did manage a 45 pt rally off of its lows but sagged into the close. Soybean oil remains closely tied to the palm market which is tied closely to the food market. The ongoing coronavirus fears have those markets staying under pressure. Last but not least; if the US processor is going to ramp up his crush in an effort to produce more meal that in turn creates additional bean oil stocks thusly the buying of meal and selling bean oil.

The interior soybean basis continues to hold strong from slow producer selling. The gulf basis for soybeans continues to hold firm from that same slow producer selling. Soybean spreads were soft early mostly from 1st Notice day fears but that softness went away as the market started to rally. It was pretty much the same scenario for the meal market. Both the interior and export meal markets have firmed in the past few days.

As goes the soybean meal market so goes the soybean market. The price action in soybean meal went from looking iffy just two days ago to looking strong today. $305.0 to $310.0 looks to be a significant technical resistance area for May meal. I’m showing closing trendline resistance just above tonight’s close. A conclusive violation of that trendline will have May meal grinding through the aforementioned resistance levels. Remember that the spec trade is a healthy short in this market. Early this morning it looked like the May soybean market was about ready to come unglued. The resulting minor reversal says not so fast. $9.00 to $9.10 shows up as a formidable resistance level for May soybeans. A close only chart suggests a close over $9.05 could prompt a healthy run of short covering. As in soybean meal the spec is a sizable short in soybeans. Needless to say the soybean oil charts remain ugly looking. May soybean oil minimally needs a close over $29.70 just to steady things up.

Daily Support & Resistance – 2/28

May Soybeans – $8.86 – $9.06

May Soy Meal – $299.0 – $309.0

May Soy Oil – $28.70 – $29.75

The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.